Hormel Foods (HRL) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 2026 reached $3.03 billion, with organic net sales up 2% year-over-year, marking the fifth consecutive quarter of growth, driven by Foodservice and International segments, while Retail declined.

• Adjusted diluted EPS was $0.34, supported by strong Foodservice and International performance, but offset by Retail margin pressure from high input and logistics costs.

• Portfolio shaping continued with a definitive agreement to sell the whole-bird turkey business, sharpening focus on value-added protein offerings and reducing exposure to volatile, low-margin segments.

• A $23.5 million gain was recognized from the sale of a controlling interest in Justin's, LLC.

• Cash flow from operations increased to $349 million, mainly from inventory reductions.

Financial highlights

• Q1 net sales exceeded $3 billion, with 2% organic growth year-over-year; Foodservice up 7%, International up 8%, Retail down 2%.

• Adjusted operating income was $247 million; adjusted operating margin was 8.2%.

• Gross profit margin declined to 15.5% due to higher input and logistics costs.

• Net earnings attributable to shareholders were $181.8 million.

• Paid $160 million in dividends, marking the 390th consecutive quarterly dividend.

Outlook and guidance

• Fiscal 2026 net sales guidance reaffirmed at $12.2–$12.5 billion, with organic net sales growth of 1–4%.

• Adjusted operating income guidance updated to $1.06–$1.12 billion, reflecting 4–10% growth.

• Adjusted diluted EPS guidance reaffirmed at $1.43–$1.51, up 4–10% year-over-year.

• Effective tax rate for fiscal 2026 expected between 21.5% and 22.5%.

• Whole bird turkey divestiture expected to reduce 2026 net sales by ~$50 million, with minimal EPS impact.